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Budget and renewable energy

The decision of duty free import of equipment for renewable energy, LEDs and allied equipment is a strategic decision. It will revolutionize energy sector, help end load shedding, create millions of jobs, revive economy, broaden tax base, end need for overseas employment, foreign loans and oil. China used renewable energy to expand its economy and protect its strategic interests. The scheduled meeting of PM on energy crisis can use the following points to achieve the objectives of Budget 2013-14.

Government should scrap contracts of IPPs. The circular debt is failure of energy sector and IPPs so they should go bankrupt. Tax money should not be used to bailout private sector power producers. Reportedly, the provisions of IPP contracts allow billing on [their] installed capacity instead of actual output, which drives circular debt and its re-accumulation. No government and court of law can uphold such contracts. IPPs can produce a unit of electricity for 3 rupees but they have been over charging on different pretexts. Their annual profit is Rs 122 bn (Power crisis: IPPs solution to load shedding, 9 June). It will allow government to save and keep $ 3-4bn in foreign reserves (being used for IPP oil imports), reduce resultant debt, inflation and poverty.

Nationalizing of energy sector is the future. The tenfold increase in energy prices, corruption and hoarding in UK’s energy sector shows that privatization, market and completion has failed to serve consumers and taxpayers. Country’s energy infrastructure is crumbling due to lack of investment by private sector. Whereas government controlled energy sectors of China, Gulf States and many EU states are serving public, economy and national interest. The manpower requirement will decrease and earnings will increase in energy sector due to renewable energy, technology and modernization. Pakistan therefore needs to scrap PEPCO and Discos and bring energy sector under state control.

Renewable energy can help cut electricity cost by 50 % annually. The experts expect an 18-20 % annual increase in cost of energy production. The 25% cost (independent estimates 40%) of line loses, thefts and free electricity increases the per unit price to 45 % (Rs 9 +2+1= 12). By shifting 30 % of annual energy production to renewables, the government can bring down the price of per unit of electricity by 50%. In last 3 years, the cost of solar panels has come down by 70% (the Guardian). The 70-80 cents/watt price of solar cell will come down further and its 15 life (20-25 year warranty) will repay its cost. Oil and gas rich Saudi Arabia will generate 54 GW from renewables (41 GW solar and 13 GW from wind, geothermal and waste energy plants) by 2032 (03 April 2013, the Arab News).

Renewable energy can help create millions of jobs. PM’s youth employment programs (YEPs) are positive step, but two changes should be made in the program. It should be expanded to accommodate two-three million unemployed youth and stipends should be replaced with low interest bank loans (2-3%) to adopt renewable energy in three sectors of economy to end unemployment. It will end criticism and improve their effectiveness. Due to corruption, a similar program failed in India in first term of Congress. The vocational training should also include renewable energy. Saudi Arabia plans to create 3 million jobs in next 30 years by adopting renewable energy. Europe, America and China have successfully used renewable energy to create millions of jobs.

By giving renewable energy loans to home owners, small and medium businesses (SMEs), farmers and cottage industry, government can reduce energy consumption, cut overhead business costs, theft, line losses and provide relief to public in form of lower bills of pharmacies, schools, hospitals, dairy/ food products, water recycling and transport sector. Europe and China are using solar panels (paint, flexible, PV, solar thermal) on transport (rooftops, railway stations/ bus stops/airports), businesses (shops/cafes/businesses/restaurants/ shopping malls/marriage halls etc), advertisements (billboards etc), and public lighting. Pakistan can use kinetic energy generators on footpaths/pavements to light its markets on line of Chinese pavilion in Shanghai Expo 2010.

China has used renewable energy to increase argi-produce by 30 percent. Instead of giving daily subsidy of Rs 1-1.25bn on electricity or free tube wells, the government should allow low interest loans (2-3 %) to farmers to shift to renewables. It will cut costs and improve produce. UAE is using hybrid windmills that produce electricity and 800 liters of water daily. The renewable energy is being used in China to pump water, clean water, recycle water, which add to per acre yield, cattle farming, dairy products and creating jobs. Furthermore, the shifting of fertilizer sector to renewables can cut cost and free gas that should used to reduce poverty by giving cheap gas to households and transport sector. The loans can returned in form of monthly deposit to banks in line with UK instead of paying monthly bills to the energy companies.

Pakistan should develop mega water storages for storing rain water, improving per acre yield, expanding arable land, agriculture and cattle farming in southern Punjab, Balochistan and interior Sindh and northern areas as part of food security, creating millions of jobs and protecting national interests. Finally, government should give unbranded android-based tablets (2GB RAM, QC processor, 16/ 32 GB ROM + SD card+ telephony) with add-on keyboards to students instead of computers. It will allow seven times more students to benefit from the program within the same budget. Computers and their OS are already outdated.